A Brief History Behind The Rolex Shortage
It is one of the most controversial topics in fashion. Wait till you read about it!
The line between Rolex enthusiasts and die-hard watch connoisseurs is drawn in beach sand. The distinction is pretty clear until…you get the point.
Rolex has a solid reputation as a brand with serious competitors like Omega and Grand Seiko. But, the allure of the brand is its ability to create timeless pieces with a famed waiting list. The latter is frankly quite off-putting, especially, if you have the money.
The Truth Behind It
So, why not get a coveted Omega Speedmaster or the Moonwatch. Maybe, you should. Also, the Seamaster, a watch that is gaining a speedy following since the new OO7 flick, No Time To Die, hit theaters.
The availability of such watches is never in question. However, when it comes to Rolex, then, why the long-waiting time? Why can’t one simply walk into a dealership and get a mass-produced Daytona?
We’ll talk about the reason behind this and many other things. It is called the Rolex shortage.
Higher Prices? We’re Short!
The sad truth behind purchasing a watch like the Oyster Perpetual: 36mm Ref 126000: is that it costs around 4,450 pounds when purchased from an authorized dealer.
Yet, in the grey market, that price can reach 7,000–8,000 pounds. Almost, double the price! In fact, a whopping 1200+ watches have found their way into the grey market within a year of the new model’s release.
Rolex makes around a million watches every year. The strangest part is they are all mass-produced. However, many of them go in the secondhand market. So, how did the Rolex shortage start?
The Rolex Shortage
Doubtless, Rolex is a highly recognizable brand considered once as UK’s top watch brand. No matter whom you meet, they will have heard of the name, Rolex. The company prides itself on its brand image and continues to build it today. Therefore, the watch has amazing resale value.
With the pandemic, there has been tremendous growth in demand for high-end watches. Prestigious watchmakers like Patek Phillipe, Audemars Piguet, Richard Mille, and of course Rolex continue to hold limited production runs. This tactic has made the watches desirable and rare.
However, it has spawned a business of buying, selling, and flipping previously owned and vintage watches along with a growing number of start-ups competing to become the dominant digital marketplace.
Today, Rolex watches are synonymous with success, class, and elegance. But, what cramps their style is the year-long waiting lists for the most iconic sports models like the Rolex Submariner. The Rolex Submariner looks like this:
About the Secondhand Market
The secondhand market is a quickly growing industry which is now at 20 billion dollars. McKinsey predicts that the number could go to 30 billion dollars by 2025. German startup, Chrono24 recently raised 100 million euros from various investors.
The investment valued Chrono24 at more than $1 billion, making it the first “unicorn” in the secondhand market segment. The company said it carries about 500,000 watches from more than 3,000 retailers and over 30,000 private sellers.
The Low Production of the Daytona
The first generation of Daytona watches featured an exotic variant dial or “Paul Newman” dials. These watches are true collector pieces. The Paul Newman Daytona fetched $17.8 million at an auction, making it the record for wristwatches.
The Daytona features a complicated movement, which is one of the reasons why it is produced relatively less. Also, another reason for its low production is that once the Rolex Daytona became popular, the brand sought to reduce production to keep the public on its toes.
So, let me put the Rolex shortage into perspective. You cannot get a professional Rolex watch until you wait for years. It’s almost like buying a car in Soviet Russia.
The Daytona is even harder to find and the waiting list for it became apparent to people in 2016. The Daytona 116500 was launched that year at Baselworld, a famed watch trade show.
People started talking about the “Rolex Shortage”. What’s worse was customers who got their watch early showed it on social media and demand spread quickly. Now people were noticing the obvious shortage of this iconic watch. Many were asked to wait for years. This has been the case with the Daytona since the 1990s. It is the same with any new model.
Plus, Paul Newman’s endorsement of the watch made it even more desirable. At one point in time, the watch was deemed unattractive until Paul Newman strapped it on his wrist. Then, it became cool and sophisticated.
Theories Behind the Shortage
Even though the watches are mass-produced, most are on the secondhand market. It’s just that the demand for them far exceeds the supply, leading to a shortage- despite how many are made.
The shortage is much more obvious in the stainless steel sports models, where demand is more than supply. Strangely, if you visit Chrono24, you will get many search results for the Rolex Submariner 116610LN. Here’s how many:
If you went to an authorized dealership, you would probably hear that their waiting list is full. They would maybe mention that it is impossible to get your hands on one due to the constant demand. Some customers also report being met with a narky attitude when asking around for this particular watch.
Conclusion
Rolex is a solid brand with reliable watches. Yet, the waiting lists are truly heartbreaking. However, many are quick to blame the brand for the shortage. It might be the fault of the grey market dealers that sell flipped watches.
Since the market for high-end watches has been ever-increasing since COVID-19, the longer this continues, the more people will lose respect for timepieces that are truly worth the wait. In fact, there isn’t a shortage of watches, they are just in the wrong place.
However, many believe that Rolex is cutting supply on purpose to induce FOMO. Scarcity has a great effect on a person’s perception of luxury. Rolex watches are extremely difficult to get at retail prices. To be honest, you get a great deal when bought from a dealership.
Sadly, most customers go to an authorized dealership looking for a Submariner, only to be told that it is near impossible to get one. So, they purchase the second closest one to get such as the Explorer II.
This probably benefits the dealership because if someone doesn’t get a Submariner, they will satisfy themselves with a Oyster Perpetual Datejust that didn’t catch someone’s eye. However, which watch brand would want to drive customers away?
